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Due to demonetization in india on Nov 8th 2016 hits a huge impact on every sector and majorly effects on real estate sector. This move by our PM Modi government could bring a big impact on the country. The drive against black money and corruption may well be a masterstroke to everyone and everyone knows that a lot of black money goes into the real estate sector. So , let us consider some of the impacts that strike Indian real estate.

Will buying a house become affordable?

The government’s decision could dry up black money inflow into the real estate market. This would get rid of cash transactions that are unaccounted for real estate sales. This sector deals with significant amount of cash on a daily basis. So, the sudden withdrawal of higher-denomination notes may have a short-term impact on developers. Property prices could dip in the near future as demand falls. Most buyers will avoid paying in cash at least for the next two months. The demonetization move to curb illegal money could get support from implementation of the Real Estate Regulation Act. That means the Indian property market could witness a significant fall in price. This could make it easier for regular people to buy a house.

Impact on real estate:

The decision will have a huge impact on real estate as the sector deals in large amount of cash. Cash transactions allow developers to save on tax. Buyers get to save on stamp duty. People invest in real estate to exhaust their unaccounted cash. Now, with fewer potential buyers in the property market, the sector could see a short-term slump. Reputed builders and the primary property market may not feel a major pinch. That is because their transactions go through banks. But in the resale property market, small and unorganized builders may see a major impact. That is because their transactions involve higher reserves of cash.

Impact on home loan interest rates:

As more legal cash enters the banking system, the volume of bank deposits will increase. Higher deposits would result in more lending by banks. As lending increases, the interest rate charged may come down. A cut in the repo rate by the Reserve Bank of India last month already brought down the home loan interest rate. Now, with the ban on higher-denomination notes, loans are likely to become cheaper still.

Demonetization was so one in all the most well liked topics that stirred the Indian population throughout the forth quarter of 2016. It absolutely was the right move by PM Narendra Modi to curb the pile-up of black cash during this sector. The sale of realty came to a unexpected halt when the termination pass on 8th November, 2016. However, several realty specialists have recommended that this compile of inventory owing to low sale would lead a downfall within the property worth within the year 2017. In fact, this move would additionally create the transactions in realty a lot of clear and transparent.

The real estate sector is that the one wherever most of India’s black cash is invested with, and with this termination move, there would be a correction within the worth during this sector. Aside from that, people would additionally like investment their hard-earned cash within the primary sector which too that is developed by well-known and sure builders.

Residential real estate which was already seen a downfall because of low confidence of consumer and slow sales as because of separation and share market value and has taken the brunt of many policy announcements this year. Due to real estate regulatory act and demonetization introduction the new launched and sales became static as both home buyers and developers are in a wait and watch mode, however there are top ten locations in India that are set to become the residential hotspots in this year. Telangana has been growing rapidly in the real estate sector after hitting a stagnation point caused by the bifurcation of Andhra Pradesh. Hyderabad is filled with several residential apartments and commercial complexes. However, there are many who prefer to buy plots for a good investment or to build homes.